Fleet News

Fleets warn Government on ECO taxes

GOVERNMENT officials will be told by the fleet industry that taxing employee car ownership schemes will result in company motorists driving poorly-maintained and higher-polluting vehicles.

The view will be put to HM Revenue & Customs (HMRC) as part of its review of future tax policies and employee car ownership (ECO) schemes.

It called on fleets to help develop those policies and is hosting a series of meetings with industry figures, the first of which was held on Tuesday.

Executives from GE Commercial Finance, Fleet Services will attend one of the meetings where they will warn that taxing ECO contributions by employers, which are currently tax free, could lead to ‘more companies adopting uncontrolled cash-for-car schemes which would, in turn, see more poorly maintained, higher polluting vehicles adopted for use as day-to-day company transport’.

The company’s head of structured finance, Gary Killeen, said: ‘At the heart of this debate is the difference between ECO schemes and cash-for-car. An ECO scheme sees a company give its employees the option to move out of traditional company cars in a controlled and well managed fashion, ensuring that they drive well maintained, safe and environmentally responsible vehicles.

‘In contrast, cash-for-car means that an employer is basically attempting to opt out of any responsibility for the cars driven on business by their employees. As a result, the cars used are generally older, more polluting and not maintained to the standard of a company car or ECO vehicle.’

One company that specialises in ECO schemes says its own research suggests that the vast majority of drivers feel a strong sense of ownership for their ECO car.

Bosses at Provecta Car Plan call this the ‘ethic of ownership’ and claim that it reduces company running costs because drivers cover fewer miles and take more care of their vehicle.

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